So – you’ve decided to get started flipping cars for profit. Now, unless you’ve got a truly impressive explosive hydraulic system built into your driveway, we’re going to assume that means flipping cars in the financial sense – in other words, buying them from online car auctions to fix them up, and sell them for profit. It’s something that quite a lot of our customers do in our online salvage car auctions here at RAW2K, but it takes a bit of skill and savvy to do it. So if you’re just starting out, here are the five most important things you need to know.
Take a moment to size up your profit margins
Just as with so many jobs, when it comes to fixing up cars, everything comes down to a calculation between time spent and money earned. Before you take on any customers, you’ll need to work out how much time is economical for you to spend on each job, in order for it to be worth doing. It’s not unusual for people to get into flipping cars thinking they’ll be making thousands each month, and later re-balance their books to find they’re often earning less than minimum wage. It just goes to show how it’s going to require not just mechanical skill, but a certain amount of financial savvy too.
And of course, don’t forget that age-old adage: buy cheap, sell fair. In other words, don’t be tempted to retroactively bump up the price you’ve quote for a customer just because it’s taken longer than you expected. If you think that has a chance of happening, you need to be honest with them about it from the outset, so they don’t have any nasty surprises. Because you may be able to make a few one-off profits this way, but people won’t come back – and even worse, they may start telling your other customers not to either.
Start with simple, basic repairs
Take care not to be too ambitious with your workload right off the bat, as it’s a very easy way of accidentally stretching yourself too thin, and disappointing customers. And once again, in the early stages it’s all about building up that reputation by social media and word-of-mouth. And if you immediately get a reputation for under-delivering or rushing work for your very first customers, then it’s going to become considerably harder to build up that early momentum – and may even kill your project entirely.
Instead, make it easier for yourself by tackling the simpler, easier jobs that you know you can handle, and making sure you’re reliable and on-time with everything you’re promising. Punctuality precedes profits!
Build a network of contacts
If you’re just starting out, there’s a good chance that you may only have the fundamentals to work with in terms of tools and expertise. If that’s the case, before you get started you’ll need to think about what happens when a customer comes to you with a job that’s beyond your expertise. For example, you could direct them to another local business that you know for a fact will be able to handle it, and depending on the nature of your relationship with them, you may even find that they eventually start directing customers back your way in turn.
Alternatively, you could choose to partner directly with said business and use them as a sub-contractor. The earnings initially won’t be fantastic, as obviously they’ll expect earnings of their own too, but once again, as soon as you can establish that steady stream of customers then you may find these income streams start accelerating in the long term.
Have you got all the space and tools you need to work
Now, this is obviously quite a bit one, as the kind of work you’re able to undertake will be determined by quite a large degree by what kind of space you have to work with, and what tools you have access to.
If you’ve only got your personal garage or driveway to be working on for example, then you’ll probably only have space for one or two at a time. If you have access to a shared garage or communal space on the other hand, you might be able to undertake more than one job at a time. However, you’ll have to factor in security in that you’ll need to know who has access to the space and how they’re going to secure it properly. A stolen car from your premises would be an unspeakable nightmare.
The same goes for your tools. The type of jobs you’ll be able to take on will be limited by what types of tools you’ve got, so take a quick inventory, and maybe consider expanding a bit further on down the line.
Make sure that you’ve got all the legal and paperwork aspects sorted
There’s nothing worse than getting an unexpected letter from HMRC (unless it’s a very rare rebate), or a cease-and-desist letter from authorities or a property management company. Before you start anything in earnest, you’ll need to make absolutely sure that you’ve got all the paperwork sorted out, that you’re meeting your legal and tax obligations, and that you’re safely registered in all the ways that your customers and the authorities would expect you to be.
That way, you won’t have to worry about getting slapped with any disciplinary notices, fines, or even in-person visits from bailiffs or enforcement officers. There’s no quicker way to kill a side-hustle than a visit from any kind of investigators!
Those are just a few of our top tips, but it’s also a good idea to ask anyone else you know with direct experience of setting up side-hustles, or mechanical expertise. As for us, we can provide something arguably just as crucial – a steady supply of salvage vehicles for you to fix up and flip for profit.
We’ve got a huge range of salvage cars to choose from in our online car auctions, including many from world-famous brands like Mercedes, Citroen and Peugeot. Our auctions are refreshed on a daily and weekly basis, so there are always bargains to be found. Why not take a look around, and see what you can find?
